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Used car prices soar due to chip shortage, how to cash in on your clunker
With fewer new cars to buy, consumer demand for used cars is going into overdrive.
CHICAGO - A microchip shortage that is slowing down new car production is also turning up the heat in the used car market.
With fewer new cars to buy, consumer demand for used cars is going into overdrive.
Auto experts say you can get a good deal if you want to sell or trade in your used car.
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"The lack of new cars being sold causes a problem with used cars. There’s no trade ins," said Bill Haggerty, dealer and operator of Haggerty Buick GMC.
There are not a lot of used cars out there because consumers have been buying them since new car production is slow due to the shortage.
Some dealers are doing everything they can to drum up some inventory.
"For us to get used cars, we are trying every means possible," Haggerty said. "We are calling customers that aren’t in the market to trade in their car. We’re calling customers that have leases."
The microchip shortage is expected to last until at least the end of the year.
Dealer inventories are low and consumer demand for cars is up due to COVID and stimulus money.
"People got money in their pockets and thought, wow, I’m gonna need a car because I’m not as excited about using mass transit as I used to be," said Dave Sloan.
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Patrick Cross said he's planning on spending his stimulus money for a new plow truck, but before he does, he's going to ask some tough questions of his own.
"How much is it going to cost me? What's my payment? What's my warranty," Cross said.
To get the best deal, experts suggest you don’t trade in your car and buy your next one at the same place.
"There may be another dealer somewhere that’ll just take your vehicle and cut you a larger check," said Bernard Swiecki, research director for Center for Automotive Research. "If you go to a more remote location, that dealer is facing fewer clients, fewer calls, less demand."
It’s not hard to cast a wider net when shopping around for cars now because you can do most of it online now.
Dealers know that if they don’t respond to your emails or phone calls quickly, they are out of the game since most consumers go with either the first or second dealer who gets back to them.
Here are a few other tips from the experts we talked to:
- You can still negotiate but will have better luck with some vehicle types than others.
- Be flexible when it comes to your budget or the car options you are looking for.
- Try to break even on the price you trade your car in for and what you spend on the next one.